Must read: Frasers shares slump, UK ekes out modest growth
ii’s head of investment rounds up the morning’s big news.
16th July 2026 09:17
by Victoria Scholar from interactive investor
Frasers’ founder and former chief executive Mike Ashley. Credit: CHRIS J RATCLIFFE/AFP via Getty Images.
Frasers Group
Frasers Group (LSE:FRAS) reported full-year adjusted pre-tax profit down 4% to £538 million, below expectations for over £560 million. The company also refrained from issuing any financial guidance for 2027 because of its recent takeover offers for Hugo Boss AG (XETRA:BOSS) and Accent Group Ltd (ASX:AX1).
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A combination of disappointing full-year earnings and a lack of clarity around next year’s outlook has sparked nervousness among investors, sending shares down by almost 6%, dragging out retailers like JD Sports Fashion (LSE:JD.) and Marks & Spencer Group (LSE:MKS) down with it. The company said it faces headwinds from tough trading conditions, subdued consumer confidence and excess inventory, suggesting there’s still much work to do in its transformation plan or ‘Elevation Strategy’ as it looks to reposition the conglomerate towards the upper end of the market. It wants to focus more on premium and luxury brands, typically a much more resilient part of the market to the ups and downs of the economic cycle. This position shift underscores the rationale behind the company’s £1.73 billion bid for high-end brand Hugo Boss in June.
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After today’s drop, shares in Frasers Group remain higher by around 6% so far this year and 11% year-on-year, outperforming the FTSE 250. However, analysts are on the fence towards the stock - according to Refinitiv, there is a consensus ‘hold’ recommendation on Frasers Group.
UK GDP
The UK economy grew by 0.1% in May, in line with expectations and bouncing back from a contraction of 0.1% in the previous month. GDP reached 0.7% in the three months to May, beating forecasts for 0.5% and logging the sixth straight three-month expansion. Year-on-year GDP hit 1.3%, slightly below expectations but still coming in around a one-year high.
May’s monthly reading was supported by the UK’s dominant services sector, offsetting weakness in construction and production. From March to May, growth was supported by strength in the computer programming, advertising and pharmaceutical sectors.
Today’s mixed data highlights the uphill battle on the economy facing the soon to be new prime minister Andy Burnham and his expected chancellor, Shabana Mahood. As a centrist, she is likely to be largely well received by the City, although little is known about her views on economic policy.
Amid the backdrop of frail growth, sluggish productivity and inflationary pressures from the Iran energy shock, the government has a lot of work to do to transform the economy and drive growth.
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